Farm-gate prices of food items ‘unusually low’ this season

Farm-gate prices of agriculture commodities like rice, pork, poultry went down in the last few months of 2018, which is unusual as demand normally goes up during Christmas season.

This was pointed out by Samahang Industriya ng Agrikultura (SINAG), one of the strongest agriculture lobby groups in the country.

In an interview, SINAG Executive Director Jayson Cainglet said such price trend happened at a time when imports continue to flood the local market.

Imported supply is normally cheaper than the locally produced agriculture products because of the high cost of production in the Philippines as well as the significant rate of post-harvest losses for farmers.

To make matters worse this year, Tax Reform for Acceleration and Inclusion (TRAIN) also took effect, making the price of fuel costlier than ever.

Under the less than one year old tax reform, the excise tax on gasoline went up from 14.35 a liter to 17 a liter. This was supposed to go up to 19 a liter in 2019 and 110 in 2020. On diesel and bunker fuel, an excise tax rate of 12.50 a liter was first imposed. This should further go up to 14.50 in 2019 and 16 in 2020.

Right now, 30 percent of a rice farmer's production expenses goes to fuel. In the fisheries, 60 percent of a fisherman's budget has to be spent on fuel so he can continue fishing.

The Philippine government, hoping to arrest the rising cost of food commodities, then authorized the importation of agri products such as rice and fish.

This left farmers and raisers with no choice. Based on the farmgate watch of SINAG, the price of palay went down from 125 a kilo to 124 a kilo from July to September, while the price of galunggong fell from 170 a kilo to 165 a kilo.

The price of chicken at farmgate also declined from P95 per kilo in July to 1 92 per kilo in September and 170 per kilo in December. The downtrend also happened to pork, which saw its prices going down from 1135 per kilo in July to 1130 in September and 1120 this month.

"It's the first time in five years that farm-gate prices of these products fell during Christmas season. The retail prices are still the same even with imports but the farm-gate prices are falling from September to December," Cainglet told Business Bulletin.

In 2019, he said that such price trend may continue as the government is inclined to import more.